07 September 2009

Gender pay gap in the City

There's an article on BBC News this morning, Gender pay gap in the City 'shocking', that says that women in the financial sector in London get paid far fewer bonuses than men. Some equality bod says in it that "the sector must take action to redress this shocking disparity of rewards", and the government has talked about tough new measures to tackle the pay gap.

I would agree that if men are receiving five times more in bonus payments than women, and if women aren't reaching the upper echelons of the companies solely because they are women, then that's shocking and should be redressed.

The article blames entrenched recruitment patterns, and practices which intentionally or not inhibit women's success for the disparity.

BUT, I also read this article in the Economist this week, called Risky business. The article outlines a study on attitude to risk, which is important in a lot of financial jobs, and the levels of testosterone in a person's body. The study claims that if you look at people as individuals, regardless of sex, and factor in their testosterone levels, any perceived sexism vanishes. Men and women with the same testosterone levels performed the same in the study, from those who were more risk-averse to those who were more comfortable with it.

When the study tracked people through into their careers, they found the same correlation between testosterone levels and where they ended up: those with higher levels were more likely to choose risky jobs in finance.

So based on that, I now don't know what to make of the first article on pay disparity. If bonuses and promotions in the financial sector are linked to performance, and if those with higher testosterone levels (admittedly being mostly men) perform better, is it really sexist? And is it realistic to introduce quotas and other measures to eliminate the pay gap? That could artificially reward women whose performance doesn't merit it.

It's an interesting argument anyway, and one that probably hasn't been considered by the Equality and Human Rights Commission. It's only one study of course, so more work would be needed to corroborate it, but it muddied the waters for me rather and gave me something to think about.

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